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In this episode, Chelsea explores the consumer habits that are wrecking our collective mental health, from going into debt to keep up a certain lifestyle to watching endless haul and OOTD videos.

Sources:

https://www.inc.com/amy-morin/social-media-changed-what-it-means-to-keep-up-with-jonses-its-taking-a-toll-on-everyones-mental-health.html

https://www.luxurysociety.com/en/articles/2018/09/millennials-interest-luxury-goods-surpasses-their-funds

https://www.nimh.nih.gov/health/publications/chronic-illness-mental-health

https://ppcprotect.com/blog/strategy/how-many-ads-do-we-see-a-day/

https://www.sofi.com/learn/content/how-to-avoid-fomo-spending/

https://www.creditkarma.com/insights/i/fomo-rise-half-millennials-overspend-to-keep-up-survey

https://moneyaware.co.uk/2013/05/the-stress-of-dealing-with-debt-alone/

https://www.boredpanda.com/instagram-influencer-debt-lissettecalveiro/?utm_source=google&utm_medium=organic&utm_campaign=organic

https://www.nbcnews.com/better/pop-culture/we-re-overspending-love-instagram-here-s-how-stop-ncna939961

https://www.accrediteddebtrelief.com/blog/7-ways-social-media-influences-our-spending-habits/

https://www.newyorklife.com/newsroom/emotional-cost-carrying-debt

https://www.debt.org/advice/emotional-effects/

https://www.newyorklife.com/newsroom/emotional-cost-carrying-debt

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Hey, guys.

It's Chelsea from The Financial Diet. And before we start this week's video, just a quick reminder, if you haven't already, to please hit that Subscribe button.

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I promise you, it is more than worth it. And today, I want to talk about the consumer habits that we have that, without realizing it, are leading us to become depressed. Now, I want to be clear here that when I use the word depressed in this context, I'm speaking more colloquially.

For some people, it may aggravate clinical depression. But for others, we're talking about a feeling of malaise, a feeling of inadequacy, a feeling of insecurity, a feeling of despair even about the current circumstances of your life or your financial situation or what you happen to have. We talk a lot on TFD about spending money in ways that actively bring you joy, in ways that are truly valuable to you.

And while that is going to look differently for everyone, it is very important to get a clear sense of the kind of discretionary spending that is actually paying emotional dividends. Maybe for you, a bouquet of fresh flowers every week is something that genuinely brings you a great amount of joy and makes every day feel a little bit more special, maybe especially if you work from home and see them all the time. But you could also be someone who's buying flowers out of habit and barely notices them.

But we're not really here today to talk about the wasteful spending, so much as the spending, or more generally, the consumer habits we have that are actively working against our mental health. And while not all of them may apply to you, they are all shockingly common in our culture, especially for younger people, and in some cases, especially for women. If nothing else, it's worth taking a look at just how normalized some of these behaviors and their negative consequences have become in our culture.

So without further ado, five consumer habits that are making you depressed. Number 1 is watching haul videos on YouTube or TikTok. Now, if there is one type of content that, I have to say, is just a complete net negative from every angle on our culture and on our mental health as a society, it has got to be the phenomenon of haul videos.

They are incredibly popular here on YouTube. They become more and more popular every day on TikTok. And basically, as a concept, it is a creator, usually a woman, showing all of the various items that she bought at a given store or in a given period of time.

And sometimes these are highly aspirational, featuring luxury brands, where the person is spending tens of thousands of dollars in a given shopping trip. But more common in the haul video phenomenon is hauls from stores that are more accessible to the average person. And if you're buying in large quantities, that usually means fast fashion or otherwise very unethically and cheaply made products.

Now, you could make the argument that when you're talking about a bunch of items from a new season, let's say of a clothing store, it is a more convenient way for someone to get a look at all of the various new items on offer, on an actual human body without having to scroll through an e-commerce website. And there are certain haul videos that don't have the same negative underpinnings because, basically, the only way to shop at these stores is in haul form. I'm thinking, of course, about grocery stores.

We've even done a video on this very channel about what the same grocery haul will cost at several different grocery stores. But let's be clear. If you're going to a grocery store and just buying a couple of items at one time, you are absolutely doing it wrong and probably spending more money in the long run.

But for the vast majority of haul videos, we're talking about shopping in a way that is neither particularly adapted to any budget-friendly lifestyle or sustainable on any sort of environmental or even personal level. And while the implications of a video in which an individual took 500 of their own dollars and bought a bunch of clothing at Fashion Nova isn't great from several different points of view, it becomes all the more insidious when you realize that a lot of these haul videos are not even being paid for by the creator. Many haul videos, especially for clothing, are sponsored by a specific brand, which means that those influencers are rarely paying full price or even at all for those products.

In fact, they're often getting paid. Usually, the brand gives the influencer a budget, like 10 items or $1,000. And the influencers get to pick which items they want for a haul video.

And on top of that, they will often get paid a flat fee for making it. And if you click one of the links in their video description to buy something, they're probably getting a commission on that too, which is more often than not not properly disclosed. So not only are they not paying for the clothes, they're actually making money from the haul videos.

And in many cases, the viewer is none the wiser about any of it. But when you look at the kind of consumer habits that haul videos are basically designed to normalize, the idea of buying one or two new items in a given season seems ridiculously low and as though you're depriving yourself. There is undoubtedly a chicken-or-the-egg phenomenon here.

But when you connect the haul video phenomenon, which has been around for about 15 years, to the extent to which fast fashion has given rise to up to 52 micro-seasons in a given year of clothing, you start to understand the dynamic in which we're all being trained to think that constantly acquiring new items and acquiring many of them is the normal way to shop. And feeling like you can't keep up can be a major bummer. Studies show that comparing ourselves to the flawless highlight reel that we see on social media can lead to feelings of inadequacy and depression.

And when we forget that those people are literally getting paid to look perfect because they often don't even disclose it properly, it can tank our mental health. And a perhaps less nefarious but arguably more ubiquitous phenomenon is the hashtag #OOTD, or Outfit Of The Day trends. This is something I have participated in every now and again myself, not using the hashtag, I don't think.

But in any case, the concept is the creator is showing you just a picture of what they're wearing. They'll often tag the various brands or give more details on the outfit. But on its surface, the idea is pretty straightforward and honestly, even before social media, nothing particularly new.

This is what I'm wearing today, not that complicated. But there was a massive surge of outfit-of-the-day videos on TikTok in August of 2021, during rush week at the University of Alabama. It was a nonstop deluge of 18-year-old girls in designer brands and expensive pieces specifically chosen to impress their sorority of choice.

And while it was a fascinating look into a bizarre subculture of Americana, it was also an example of why outfit-of-the-days can really bum us out. The problem with many of these videos or even still photos is that they are often being explicitly curated in a way that is not realistic. They're picking their most expensive items, assembling outfits that are completely impractical to wear to different scenarios, or wearing special occasion outfits that are being passed off as an everyday look.

And for those creators who do this on an almost everyday basis, it heightens the pressure to never wear the same thing twice, leading to overconsumption and the perception on behalf of the viewer that wearing the same thing frequently is abnormal, when that's the basis of most functional wardrobes. The culture of things like hauls, micro-seasons within fashion, outfits of the day, and always wearing something new bleeds into the mind of the average social media user to the extent that many of us don't even like posting photos on our own grids if we've already been posted in that outfit. Objectively, this is ridiculous.

Right? Everyone knows we wear the same things sometimes. But the culture of always needing to impress and give the impression that you have something fresh on on a daily basis has been so normalized in these viral videos and photos, as to fundamentally alter our perception of how our wardrobe should look.

And similarly, number 2 is obsessing over luxury items. Luxury brands are entering new platforms like TikTok to reach younger consumers. Gucci's videos regularly surpass a million views each.

And it is working. A survey of millennials revealed that they spend an average of $500 per month on luxury items. 51% said that they would forgo healthcare in favor of luxury goods. And this is especially upsetting when you consider that people with chronic health issues are at a higher risk for depression.

And not having health care would only exacerbate that problem. Who are you guys? Literally, who are the people who are spending $500 a month on luxury items and would forego healthcare in order to buy them?

I assume these people exist. But get right with God. Now, let's also be clear and put an asterisk that the fact that people even can choose between healthcare and anything else is wrong.

Healthcare is a human right. We're the richest country in the world. Give people healthcare for free.

We're the only developed country in the world where it's not a thing to just have healthcare. What is wrong with us? We deserve better.

Get it together, America. We spend more per capita on healthcare than any other country that has universal healthcare. Bernie Sanders 2020, he can still pull this one out.

Medicare for all. And listen, I am all for spending extra on an item that is of high quality if it is going to mean a lower cost per use in the long term or in other ways significantly improve your quality of life. That is true of many things.

For example, if you're buying something like a good pair of leather shoes or a nice coat, often going for the nicer, higher quality, better assembled item is going to result in having to replace it less, having to repair it less, and generally getting a lot more use out of the item. Similarly, ever since I switched to my Dyson vacuum cleaner, a.k.a. my son, a.k.a. my husband, I have never looked back. I love vacuuming.

I really need to do it though. I've been gone for a month. That was gross.

But listen, get a Dyson. You'll know what I'm talking about. But it is important to remember that just because something is expensive or has luxury status or is marketed in an incredibly effective and luxury-adjacent way, does not mean that the product is better, or that it's better for your life.

To quote The Gay and Wondrous Life of Caleb Gallo-- Sometimes, things that are expensive are worse. Ultimately, luxury marketing, whether it's for a vacuum cleaner or a $3,000 bag, has to go above and beyond appealing to the actual functionality of whatever the item is you're buying. According to Forbes, luxury brands operate under the assumption that their customers are already getting their basic needs met.

They can afford rent. They have food in the fridge. And they're ready for something bigger.

So luxury brands promise to meet our higher-level needs, such as respect, self-esteem, and achievement. Luxury advertising is full of A-list celebrities, private jets, fabulous resorts. And it insinuates that these things can be part of your life too.

In other words, a designer purse won't just hold your keys and phone. The story is that you will earn the respect of others and become part of an elite community when you carry a luxury bag. You may even achieve self-actualization.

But the truth is that, in reality, almost no product is going to be able to live to this insinuated promise of becoming a better person or living a fundamentally different life. There is almost always going to be a delta between what you expect that owning that Chanel bag will do for you and what it actually does for you, especially if it means a huge hit to the rest of your budget. And that delta between our expectations and our reality in any given decision or experience is often what leads us to acute feelings of disappointment, shame, regret, longing, and even feeling worse about ourselves than when we started.

Because at least before you bought the Chanel purse, you could say to yourself, well, once I have that Chanel purse, I'll be that person I've envisioned in my head. Now you're just you with a Chanel purse. Number 3 is impulsive or compulsive spending.

Impulse spending, it comes in many forms and frankly, is more normalized than we'd like to think in our culture. I mean, whom among us hasn't made a joke about not being able to leave Target without spending $300 in a fugue state? Jury's out if it's fugue state, but I'm going to keep saying fugue.

And while it is easy to be funny and relatable with talk of overspending and compulsive ways, it is very much not a joke in our culture. According to Psychology Today, 80% of compulsive buyers being women. And there's a lot of overlap between compulsive buying and addiction.

And the temptation to buy stuff is everywhere, with the average person seeing up to 10,000 ads per day. And these aren't just random ads for stuff that isn't relevant to you. Companies have gotten terrifyingly good at understanding exactly who you are, how to market to you, and what you want to buy.

You can look at a product one time, and it will follow you around the internet for weeks, which makes it very difficult to resist the temptation. But side note, guys, get your algorithm together because the number of times that I have bought an item, and then I have seen that exact same item for weeks after the fact. It's like, I have the trash can.

I can't buy it again. Fix your algorithm. And when you're shopping online, so many of the normal barriers to making purchases you otherwise wouldn't are totally removed.

You might have before been thwarted by expensive shipping, a long wait on delivery, or a drive to the store. But now, you can get pretty much anything you want shipped to you very fast for very cheap, which is part of the reason why one of the biggest and most important tips is to, at minimum, remove all of your card information from your browsers so that you at least have the tiny barrier of needing to get up and go get your wallet, which can be more effective than many of us think. And with so many opportunities to impulse or compulse spend, we are more and more susceptible to the horrible cycle that it creates in terms of mental health.

We get a rush of excitement when we purchase, which has a name. It's called buyer's high and which can be extremely addictive and is often followed by buyer's remorse, which is often felt when we buy an item we probably couldn't afford or knew that we didn't need. And what's a great way to get rid of that nagging feeling of remorse?

Getting back on that high again and buying something new that, this time, we think will fix the problem. Regular impulse spending has been shown to decrease overall ambient levels of happiness, which can make you even more susceptible to chasing that buyer's high. So it's important to remember just how dangerous this cycle is and just how much brands are constantly trying to keep us sucked into it.

Number 4 is spending money because your friends are spending money. We talk a lot on TFD about cultivating a social circle that is not only adapted to your financial lifestyle but fundamentally very empathetic and understanding about your financial needs and limitations. If you're not comfortable saying it's out of my budget to a friend, you are often going to be drawn into spending tons of money you can't afford, while feeling like shit about yourself in the process.

In fact, 27% of millennials have reported feeling uncomfortable saying no when a friend suggests an activity that they can't afford. And according to a 2018 Credit Karma/Qualtrics survey, 48% of millennials admit to overspending, even going into debt, to keep up with their friends. And this pressure to accept our friends' invitations, when they want us to go to a nice dinner or even on a fancy vacation, is only compounded when we know that we are going to live out every single moment of what we're not able to do on social media should we decline, which many often refer to as FOMO spending.

And this can be the Fear Of Missing Out on a night out or even just a sweater that your friends are pressuring you to buy. This FOMO spending can be so great that about half of millennials have reported going into debt because of FOMO. And because it is such a stigmatized reason to have gone into debt, as opposed to things like student loans, most people who are in debt for these reasons keep it a secret.

And the irony is that racking up debt you do not feel you can talk about is more likely to create feelings of isolation in you. And what happens when you feel isolated? You want to connect with your social circle, which can increase the pressure to make it seem like everything's normal.

You're not drowning in credit card debt, and you can totally afford to go to the bar with them after work. But maintaining an image that is not true to our financial reality is the most dangerous consumer habit of all, which brings us to our last point. Number 5 is going into debt to fuel a specific lifestyle.

A few years ago, the internet went nuts over a woman named Lissette Calveiro. Lissette was working in marketing and PR when she decided to try her hand at being an Instagram influencer. But being an Instagram influencer isn't cheap.

Lissette was constantly buying new clothes so that she never had to repeat an outfit and going out for acai bowls to get a perfect photo. Eventually, she started springing for designer bags and plane tickets to create the illusion of a dreamy luxury lifestyle. But her income couldn't keep up with her influencer spending, on top of her everyday expenses.

Lissette racked up $10,000 of credit card debt while trying to achieve her influencer lifestyle. And this is an extreme example. But it is more and more common to feel that they have to spend at least some money in order to maintain certain images fueled by social media.

The level of visibility into our lifestyles that social media provides is unprecedented in human history and extends the pressure to impress our social circle and immediate connections, which has always existed, into the need to impress tens, hundreds, even thousands of people we may not even know. According to a survey by Chase, millennials are willing to spend more money if it meant that they would get a better Instagram post out of it. And 90% of millennials say that social media causes them to compare their wealth and their material possessions to their peers.

Ultimately, we'd likely be lying if we said that we don't think about the image that is being projected about us on our social media. And it is sometimes hard to parse out what spending decisions are influenced by that need to impress versus the spending decisions that we otherwise would have made anyway. A good litmus test, though, is challenging yourself not to take photos of certain things if you're worried that you may overspend because of it.

Because ultimately, all of these various consumer habits are leading us into a very dangerous cycle. Repeatedly spending beyond your means leads to debt. And the average American has $15,950 in credit card debt.

And 39% of Americans carry credit card debt month to month. And debt can lead to a downward spiral when it comes to mental health, with 40% of people in credit card debt reporting that it has had an effect on their mental health. And when you combine debt with sky-high interest rates, it can create a feeling that you will never escape your cycle of debt, which results in stats like people who are struggling to pay off debt being twice as likely to report depression and anxiety.

Ultimately, any one consumer habit can be enjoyed in moderation and be part of an overall healthy holistic relationship to your finances and your mental health. But it's important to check in with ourselves about how we feel when we hang out with a certain friend, or we see an ad for a certain item, or we watch an outfit-of-the-day video from an 18-year-old who's wearing all designer labels. I was getting that stuff marketed to me on my Instagram Reel Explore page.

And I was like, is life not hard enough? It's 2021. We are almost two years into a pandemic.

Do I need to be bombarded with a gorgeous 18-year-old wearing Prada? Probably not. We need to check in with not only how we're feeling, but also the habits that this might be creating in us.

However, having a strong relationship with our budgets, tracking our spending closely, and generally focusing more on our goals and what we're able to save than what we're spending on in a given month are great firewalls to some of the worst tendencies that these phenomena can bring on. None of us are totally immune. But we can build up a much better financial immune system.

As always, guys, thanks for watching. And don't forget to hit the Subscribe button and to come back every Monday, Tuesday, and Thursday for new and awesome videos. Goodbye.